Rights Issues in the Chinese Stock Market: Evidence of Earnings Management

Hung Gay Fung; Wai K. Leung; Jiang Zhu

doi:10.1111/j.1467-646X.2008.01019.x

Rights Issues in the Chinese Stock Market: Evidence of Earnings Management

Hung Gay Fung, Wai K. Leung, Jiang Zhu

University of Missouri-St. Louis

Research output: Contribution to journal › Article › peer-review

Abstract

<div class="line" id="line-19"> <span style='color: rgb(28, 29, 30); font-family: "Open Sans", icomoon, sans-serif; font-size: 16px;'> Using 665 rights offerings of Chinese firms, we demonstrate positive but diminishing price effects of successive announcements at the board meeting, the shareholders' meeting, the prospectus release date, and the ex&hyphen;rights date, but negative abnormal returns before the ex&hyphen;rights date. Public investors value the participation from shareholders of state and legal&hyphen;person shares in the rights offerings, which seem to be linked to the future firm performance. The results overall supports the hypothesis that Chinese company earnings are considerably manipulated in the rights issue process. </span></div>

Original language	American English
Journal	Journal of International Financial Management and Accounting [09541314]
Volume	19
DOIs	https://doi.org/10.1111/j.1467-646X.2008.01019.x
State	Published - May 2008

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Business

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@article{d7f60ee5d86f474c8231d6e30e4b9762,

title = "Rights Issues in the Chinese Stock Market: Evidence of Earnings Management",

abstract = " Using 665 rights offerings of Chinese firms, we demonstrate positive but diminishing price effects of successive announcements at the board meeting, the shareholders' meeting, the prospectus release date, and the ex\&hyphen;rights date, but negative abnormal returns before the ex\&hyphen;rights date. Public investors value the participation from shareholders of state and legal\&hyphen;person shares in the rights offerings, which seem to be linked to the future firm performance. The results overall supports the hypothesis that Chinese company earnings are considerably manipulated in the rights issue process. ",

author = "Fung, \{Hung Gay\} and Leung, \{Wai K.\} and Jiang Zhu",

note = "Using 665 rights offerings of Chinese firms, we demonstrate positive but diminishing price effects of successive announcements at the board meeting, the shareholders' meeting, the prospectus release ...",

year = "2008",

month = may,

doi = "10.1111/j.1467-646X.2008.01019.x",

language = "American English",

volume = "19",

journal = "Journal of International Financial Management and Accounting [09541314]",

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TY - JOUR

T1 - Rights Issues in the Chinese Stock Market: Evidence of Earnings Management

AU - Fung, Hung Gay

AU - Leung, Wai K.

AU - Zhu, Jiang

N1 - Using 665 rights offerings of Chinese firms, we demonstrate positive but diminishing price effects of successive announcements at the board meeting, the shareholders' meeting, the prospectus release ...

PY - 2008/5

Y1 - 2008/5

N2 - Using 665 rights offerings of Chinese firms, we demonstrate positive but diminishing price effects of successive announcements at the board meeting, the shareholders' meeting, the prospectus release date, and the ex&hyphen;rights date, but negative abnormal returns before the ex&hyphen;rights date. Public investors value the participation from shareholders of state and legal&hyphen;person shares in the rights offerings, which seem to be linked to the future firm performance. The results overall supports the hypothesis that Chinese company earnings are considerably manipulated in the rights issue process.

AB - Using 665 rights offerings of Chinese firms, we demonstrate positive but diminishing price effects of successive announcements at the board meeting, the shareholders' meeting, the prospectus release date, and the ex&hyphen;rights date, but negative abnormal returns before the ex&hyphen;rights date. Public investors value the participation from shareholders of state and legal&hyphen;person shares in the rights offerings, which seem to be linked to the future firm performance. The results overall supports the hypothesis that Chinese company earnings are considerably manipulated in the rights issue process.

UR - https://onlinelibrary.wiley.com/doi/abs/10.1111/j.1467-646X.2008.01019.x

U2 - 10.1111/j.1467-646X.2008.01019.x

DO - 10.1111/j.1467-646X.2008.01019.x

M3 - Article

VL - 19

JO - Journal of International Financial Management and Accounting [09541314]

JF - Journal of International Financial Management and Accounting [09541314]

ER -

Rights Issues in the Chinese Stock Market: Evidence of Earnings Management

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